Benchmarks trade in green; Nifty holds 9,900 mark

Indian equity benchmarks continued their trade in green in the morning session on account of buying in frontline blue chip counters. The persistent buying by domestic institutional investors and a firm trend at other Asian markets on fresh hopes Donald Trump will be able to push through market-friendly tax reforms buoyed the sentiment. The rupee opened higher against dollar on account of selling of American currency by banks and exporters. Sentiments remained up-beat with industry body ASSOCHAM’s statement that biometric cards have facilitated disbursement of as much as Rs 83,184 crore to beneficiaries of Direct Benefit Transfer (DBT) schemes without the notorious leakages of the past. Traders also took some encouragement with Finance Minister Arun Jaitley’s statement that the Pradhan Mantri Jan Dhan Yojana and the related Jan Dhan- Aadhaar and Mobile number (JAM) trinity has the potential to link all Indians into one common financial, economic, and digital space.

Investors took note that the monsoon has dipped slightly below normal in recent days and its distribution has been uneven, but rainfall is again on the upswing with forecast of heavy showers in the main crop-producing regions in the days ahead. Good rainfall is forecast for most of these regions in the next two weeks. For the next six days, rainfall is likely to above normal over plains of northwest India and over central & east India. Banking stocks were buzzing as the government has notified the Banking Regulation (Amendment) Act under which it can authorize the RBI to issue directions to banks to initiate insolvency resolution process to recover bad loans. The banking sector is saddled with non-performing assets (NPAs) of over Rs 8 lakh crore, of which Rs 6 lakh crore is with PSBs. Separately, as per report the finance ministry is open to providing capital support for facilitating consolidation among state-owned banks, which are reeling under mounting bad loans.

Traders were seen piling up position in IT, Capital Goods and TECK sector stocks. In scrip specific development, Infosys, the country’s second largest software exporter, was trading in green after the company had on Thursday named former CEO and Aadhaar-architect Nandan Nilekani as its new chairman. Adani group stocks Adani Enterprises, Adani Power, Adani Ports & Special Economic Zone and Adani Transmission were trading in green. Adani Group plans to start work on its $16.5 billion Carmichael coal project in Australia in October, buoyed by the dismissal of appeals filed against the project by Australian activists.

On the global front, Asian markets were trading mostly in green. Earnings growth for China’s industrial firms cooled in July after accelerating for three straight months, reinforcing expectations the economy will slow over coming quarters as higher lending costs and property market curbs bite. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 31,700 and 9,900 levels respectively. The market breadth on BSE was positive in the ratio of 1434:651, while 119 scrips remained unchanged.

The BSE Sensex is currently trading at 31755.55, up by 159.49 points or 0.50% after trading in a range of 31701.67 and 31786.35. There were 24 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.88%, while Small cap index was up by 0.82%.

The top gaining sectoral indices on the BSE were IT up by 1.28%, Capital Goods up by 1.27%, TECK up by 1.16%, Consumer Durables up by 1.14% and Realty up by 1.11%, while there were no losers on BSE.

The top gainers on the Sensex were Infosys up by 3.25%, Adani Ports & Special Economic Zone up by 1.86%, Larsen & Toubro up by 1.80%, Sun Pharma up by 1.72% and NTPC up by 1.68%.

On the flip side, Dr. Reddy’s Lab down by 2.21%, Power Grid down by 0.73%, TCS down by 0.68%, Bajaj Auto down by 0.65% and ITC down by 0.46% were the top losers.

Meanwhile, the government has notified the Banking Regulation (Amendment) Act under which it can authorise the RBI to issue directions to banks to initiate insolvency resolution process to recover bad loans.

Earlier, the parliament had approved the Banking Regulation (Amendment) Bill, 2017, seeking to amend the Banking Regulation Act, 1949 and replace the Banking Regulation (Amendment) Ordinance, 2017, which was promulgated in May this year, authorising the Reserve Bank of India (RBI) to issue directions to banks to initiate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016.

Under the Banking Regulation (Amendment) Act, 2017, the RBI can issue directions to banks for resolution of stressed assets. The RBI can specify authorities or committees to advise banks on resolution of stressed assets. The members on the committees will be appointed or approved by the RBI. Moving on fast-track, the RBI had in June identified 12 large loan defaulters who account for 25 per cent of the total bad loans in the banking sector.

The CNX Nifty is currently trading at 9910.30, up by 53.25 points or 0.54% after trading in a range of 9882.00 and 9916.35. There were 40 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Infosys up by 3.35%, Eicher Motors up by 3.21%, Indian Oil up by 2.06%, ACC up by 1.88% and NTPC up by 1.83%.

On the flip side, Dr. Reddy’s Lab down by 2.31%, Power Grid down by 1.34%, TCS down by 0.75%, BPCL down by 0.59% and Bajaj Auto down by 0.53% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 1.95 points or 0.11% to 1,771.12, Taiwan Weighted increased 3.1 points or 0.03% to 10,518.61, Shanghai Composite increased 31.7 points or 0.95% to 3,363.22 and Hang Seng increased 141.7 points or 0.51% to 27,989.86.

On the other hand, Nikkei 225 decreased 15.69 points or 0.08% to 19,436.92, Jakarta Composite decreased 12.76 points or 0.22% to 5,902.60 and KOSPI Index decreased 11.6 points or 0.49% to 2,366.91.